Last Week Tonight takes a shot @ Buffett

[Mike in NH]

Anybody catch the Last Week Tonight piece on mobile homes & trailer parks? It took some shots at Warren Buffett based on his stake in Clayton Homes.

“Mobile homes may be a terrible investment for people buying them, but they’ve been an incredible investment for Warren Buffett,” he said, adding that the Buffett-owned Clayton Homes, the largest manufacturer of mobile homes, generated pre-tax earnings of $911 million last year.

Granted, there was definitely a harsher focus on some other companies/people, but it still caught me off-guard, I don't ever really hear any criticism of Buffett. In fact, prior to his passing, I'd probably point to Jack Bogle and Buffett as having the highest wealth to negative press discrepancy (that's a new data point I just came up with) out of the mainstream ultra-rich in this country.

[Apple_Tango]

Yes I caught that! Kind of a dig at Buffett, along with praise for Dave Ramsey. I do like when finance people show up unexpectedly like that when I’m watching a show.

[rebel_quietude]

Fair's fair. John Oliver calls it like he sees it, and while I don't suspect Mr. Buffet is sitting in his office plotting how to raise rents on "people handcuffed to the table," it's probably worth him taking a hard look at whether his companies are acting ethically.

That said, there's an enormous difference between investing in exploitative landlords and investing in quality, affordable, relatively green prefabricated housing. There wasn't a lot of detail in the show on whether the investment vehicles / companies mentioned participate in both enterprises, which might make it harder to parse out and avoid people behaving badly.

[Pooplips]

The episode was one group of people being blamed for the money miskates of another group of people. Highlights by one sleazy bag.

Buffet owns a company that makes low cost housing. That is a good thing.

[mizzourah2006]

This is silly, because at the end of the day any home itself is a depreciating asset. It gets consumed in the same way a TV, or a car does. The appreciating asset of the purchase is the land. Manufactured homes don't typically come with that, or if they do it's not typically in an area where the land is on pace to become more valuable.

If I didn't change my flooring, paint my walls, get a new roof, etc. Every X number of years my home itself would continue to depreciate. I sometimes ask people to do this thought experiment.

Let's assume there are two homes sitting right next to each other on an identical plot of land, identical size, layout, etc. One was built in 1970 and nothing has been changed in it. The other was built this year. Which home would go for more if they were both up for sale? If it's true that "homes appreciate" as many argue then the 1970 home with no changes over the last 50 years should be worth far more. It's had 50 years to appreciate.

[Paul der Krake]

This isn't new criticism, Clayton Homes' finance division (and by extension, Buffett) has been under fire before:
https://www.seattletimes.com/seattle-news/times-watchdog/minorities-exploited-by-warren-buffetts-mobile-home-empire-clayton-homes/

[BTDretire]

That's similar to hundreds of reports claiming tax refunds are down this year. (Media message Trump screwed you) It is true, on average (usually farther down the article) they are reduced by $20 vs last year.
 But it is hard to find an article that discusses how much the average federal tax bill is reduced, the only reference I can find
says the average household tax is down $1,400. The other reference was a study in January on two family situations calculating
tax reductions of $1,600 and $1,800.

When I use Google and search "did Americans paying less tax in 2018" I get two hits saying that average tax bills are down,
two that seemed off topic and 9 that talked about the reduction in refunds.
https://www.dailysignal.com/2019/04/09/the-truth-about-how-much-americans-are-paying-in-taxes/
https://www.fool.com/taxes/2019/01/12/want-a-tax-cut-heres-how-much-typical-americans-sa.aspx
 Besides the not so subtle Trump screw you message, there is no mention that it's a bad idea to give the government an interest free loan.

 I watched ABC news with David Muir a couple days ago, he had a story about how average refunds are down, nothing about how taxes owed are down.


 

[fuzzy math]

That's similar to hundreds of reports claiming tax refunds are down this year. (Media message Trump screwed you) It is true, on average (usually farther down the article) they are reduced by $20 vs last year.
 But it is hard to find an article that discusses how much the average federal tax bill is reduced, the only reference I can find
says the average household tax is down $1,400. The other reference was a study in January on two family situations calculating
tax reductions of $1,600 and $1,800.

When I use Google and search "did Americans paying less tax in 2018" I get two hits saying that average tax bills are down,
two that seemed off topic and 9 that talked about the reduction in refunds.
https://www.dailysignal.com/2019/04/09/the-truth-about-how-much-americans-are-paying-in-taxes/
https://www.fool.com/taxes/2019/01/12/want-a-tax-cut-heres-how-much-typical-americans-sa.aspx
 Besides the not so subtle Trump screw you message, there is no mention that it's a bad idea to give the government an interest free loan.

 I watched ABC news with David Muir a couple days ago, he had a story about how average refunds are down, nothing about how taxes owed are down.

"I paid my $5 bill with a $20 and I got a smaller refund than yesterday when I paid my $7 bill with a $50...."
Its so hard to watch / read pieces of journalism that use premises like that.

[fuzzy math]

Oliver's piece on the WWE from the week before is fairly relevant with regards to employment issues.

[Pooplips]

Oliver's piece on the WWE from the week before is fairly relevant with regards to employment issues.

I would like to see the wrestlers of the WWE come together, leave and start there own company. They are voluntarily signing those contracts.

[GuitarStv]

Oliver's piece on the WWE from the week before is fairly relevant with regards to employment issues.

I would like to see the wrestlers of the WWE come together, leave and start there own company. They are voluntarily signing those contracts.

If a contract is illegal (calling employees private contractors) should it still be legally binding?

[Pooplips]

Oliver's piece on the WWE from the week before is fairly relevant with regards to employment issues.

I would like to see the wrestlers of the WWE come together, leave and start there own company. They are voluntarily signing those contracts.

If a contract is illegal (calling employees private contractors) should it still be legally binding?

I guess that depends on the legal definition of “employee”. I’m curious, how can an employment contract be “illegal” between two parties?

[Master of None]

Oliver's piece on the WWE from the week before is fairly relevant with regards to employment issues.

I would like to see the wrestlers of the WWE come together, leave and start there own company. They are voluntarily signing those contracts.

Wrestling nerd here. A new company called AEW has just started with a few former WWE talent. They are finacially backed by the Shad Khan. It would be interesting to see if they set up the talents contracts in the same way as independent contractors or more along the same lines as other professional sports. Shad Khan also owns that Jacksonville Jaguars. Might have to do some research in to it.

[Paul der Krake]

Oliver's piece on the WWE from the week before is fairly relevant with regards to employment issues.

I would like to see the wrestlers of the WWE come together, leave and start there own company. They are voluntarily signing those contracts.

If a contract is illegal (calling employees private contractors) should it still be legally binding?

I guess that depends on the legal definition of “employee”. I’m curious, how can an employment contract be “illegal” between two parties?

Employment contracts are invalidated by courts every single day.

[Pooplips]

That doesn’t answer my question. On what grounds are they invalidated?

[Pooplips]

Oliver's piece on the WWE from the week before is fairly relevant with regards to employment issues.

I would like to see the wrestlers of the WWE come together, leave and start there own company. They are voluntarily signing those contracts.

Wrestling nerd here. A new company called AEW has just started with a few former WWE talent. They are finacially backed by the Shad Khan. It would be interesting to see if they set up the talents contracts in the same way as independent contractors or more along the same lines as other professional sports. Shad Khan also owns that Jacksonville Jaguars. Might have to do some research in to it.

That’s awesome. I’ll have to look into that. Thanks.

[GuitarStv]

Oliver's piece on the WWE from the week before is fairly relevant with regards to employment issues.

I would like to see the wrestlers of the WWE come together, leave and start there own company. They are voluntarily signing those contracts.

If a contract is illegal (calling employees private contractors) should it still be legally binding?

I guess that depends on the legal definition of “employee”. I’m curious, how can an employment contract be “illegal” between two parties?

If you hire someone as a private contractor, who doesn't meet the legal definition of private contractor . . . I'd say that's an invalid contract.

[Pooplips]

Oliver's piece on the WWE from the week before is fairly relevant with regards to employment issues.

I would like to see the wrestlers of the WWE come together, leave and start there own company. They are voluntarily signing those contracts.

If a contract is illegal (calling employees private contractors) should it still be legally binding?

I guess that depends on the legal definition of “employee”. I’m curious, how can an employment contract be “illegal” between two parties?

If you hire someone as a private contractor, who doesn't meet the legal definition of private contractor . . . I'd say that's an invalid contract.

I agree. That means they should have no problem leaving for another company, job or employment opportunity.

[Paul der Krake]

That doesn’t answer my question. On what grounds are they invalidated?

Whenever they run afoul of other laws? Contracts aren't absolute.

I can't write an employment contract where I pay you less than minimum wage to be my sex slave, regardless of how eager you are to enter into it.

[GuitarStv]

Oliver's piece on the WWE from the week before is fairly relevant with regards to employment issues.

I would like to see the wrestlers of the WWE come together, leave and start there own company. They are voluntarily signing those contracts.

If a contract is illegal (calling employees private contractors) should it still be legally binding?

I guess that depends on the legal definition of “employee”. I’m curious, how can an employment contract be “illegal” between two parties?

If you hire someone as a private contractor, who doesn't meet the legal definition of private contractor . . . I'd say that's an invalid contract.

I agree. That means they should have no problem leaving for another company, job or employment opportunity.

Agreed, if the contract is invalidated before work has been completed.  No harm, no foul then.

if the contract has been fulfilled (or partially fulfilled) it becomes a more difficult problem to solve.  In this particular case I think that the employer should be responsible for the benefits that were legally due but not provided to the employee while they were working.  Otherwise there's no legal incentive for the employer to ever stop using illegal contracts.

[sol]

Buffet invests in profitable businesses.  Many profitable businesses are profitable because they are unethical.  Welcome to being an investor.

Tobacco, liquor, and opioid manufacturers are a huge proportion of the SP500.  Also shady banks like Wells Fargo.  Anyone who owns VTSAX or similar (I do) is personally profiting off questionably ethical corporate exploitation of the poor, the elderly, the financially illiterate, and addicts.

Adding in "people who live in mobile homes" to that list does not, IMO, make it any worse than it already is.

[Pooplips]

That doesn’t answer my question. On what grounds are they invalidated?

Whenever they run afoul of other laws? Contracts aren't absolute.

I can't write an employment contract where I pay you less than minimum wage to be my sex slave, regardless of how eager you are to enter into it.

Haha. Isn’t that the type of contract the porn industry is predicted on.

[Pooplips]

Oliver's piece on the WWE from the week before is fairly relevant with regards to employment issues.

I would like to see the wrestlers of the WWE come together, leave and start there own company. They are voluntarily signing those contracts.

If a contract is illegal (calling employees private contractors) should it still be legally binding?

I guess that depends on the legal definition of “employee”. I’m curious, how can an employment contract be “illegal” between two parties?

If you hire someone as a private contractor, who doesn't meet the legal definition of private contractor . . . I'd say that's an invalid contract.

I agree. That means they should have no problem leaving for another company, job or employment opportunity.

Agreed, if the contract is invalidated before work has been completed.  No harm, no foul then.

if the contract has been fulfilled (or partially fulfilled) it becomes a more difficult problem to solve.  In this particular case I think that the employer should be responsible for the benefits that were legally due but not provided to the employee while they were working.  Otherwise there's no legal incentive for the employer to ever stop using illegal contracts.

Can you knowingly sign a contract that doesn’t meet requirements then retroactively sue for the difference in benefits?

[GuitarStv]

Oliver's piece on the WWE from the week before is fairly relevant with regards to employment issues.

I would like to see the wrestlers of the WWE come together, leave and start there own company. They are voluntarily signing those contracts.

If a contract is illegal (calling employees private contractors) should it still be legally binding?

I guess that depends on the legal definition of “employee”. I’m curious, how can an employment contract be “illegal” between two parties?

If you hire someone as a private contractor, who doesn't meet the legal definition of private contractor . . . I'd say that's an invalid contract.

I agree. That means they should have no problem leaving for another company, job or employment opportunity.

Agreed, if the contract is invalidated before work has been completed.  No harm, no foul then.

if the contract has been fulfilled (or partially fulfilled) it becomes a more difficult problem to solve.  In this particular case I think that the employer should be responsible for the benefits that were legally due but not provided to the employee while they were working.  Otherwise there's no legal incentive for the employer to ever stop using illegal contracts.

Can you knowingly sign a contract that doesn’t meet requirements then retroactively sue for the difference in benefits?

Can you knowingly offer a contract that is illegal and then expect to profit from continuing to do so?

There is a serious power imbalance between employer and employee.  History has shown us that it's not one that the free market is very efficient at solving.  That's why employment law exists in the first place . . . otherwise the scales are so heavily tilted towards employers that we end up in the familiar lords/serfs pattern.

There does exist fault on the side of the employee signing the contract too of course.  But if you want the illegal situation to stop in the future, then you need to apply penalties to the group that benefits the most from the crime.  Penalizing someone for signing an illegal contract that denied him/her his rights isn't going to do this.

[SwordGuy]

That doesn’t answer my question. On what grounds are they invalidated?

Whenever they run afoul of other laws? Contracts aren't absolute.

I can't write an employment contract where I pay you less than minimum wage to be my sex slave, regardless of how eager you are to enter into it.

Alas, my bucket list will remain incomplete!  :)

[mm1970]

Oliver's piece on the WWE from the week before is fairly relevant with regards to employment issues.

I would like to see the wrestlers of the WWE come together, leave and start there own company. They are voluntarily signing those contracts.

If a contract is illegal (calling employees private contractors) should it still be legally binding?

I guess that depends on the legal definition of “employee”. I’m curious, how can an employment contract be “illegal” between two parties?

If you hire someone as a private contractor, who doesn't meet the legal definition of private contractor . . . I'd say that's an invalid contract.

I agree. That means they should have no problem leaving for another company, job or employment opportunity.

There are probably many examples.  The point being that the employer, in many cases, holds a lot of "power", so the government has made certain types of relationships/ contracts illegal. "Free to look elsewhere" is quite loaded, when the employer may be taking unfair advantage.

An example, at least in my state, would be nannies.  CA requires anyone who cares for more than 1 family's offspring at a time to be licensed.

If you employ a nanny, you are their employer.  You need to pay their social security taxes to the Feds, among other things.  You cannot, for example "nanny share" with another family AT THE SAME TIME DURING THE SAME HOURS, and treat them like a "contractor".

(If a nanny, for example, wanted to work for you MTW, and someone else Th F, then they MAY be an independent contractor.)

[Pooplips]

If two parties enter into a contract should it be illegal simply because a third party thinks it’s “unfair”?

I disagree with your premise that there is a serious power imbalance between employer/employee and that history has shown us the free market cannot efficiently solve it. Free movement of labor is the best way to solve this multi-variable problem.

[Pooplips]

Oliver's piece on the WWE from the week before is fairly relevant with regards to employment issues.

I would like to see the wrestlers of the WWE come together, leave and start there own company. They are voluntarily signing those contracts.

If a contract is illegal (calling employees private contractors) should it still be legally binding?

I guess that depends on the legal definition of “employee”. I’m curious, how can an employment contract be “illegal” between two parties?

If you hire someone as a private contractor, who doesn't meet the legal definition of private contractor . . . I'd say that's an invalid contract.

I agree. That means they should have no problem leaving for another company, job or employment opportunity.

There are probably many examples.  The point being that the employer, in many cases, holds a lot of "power", so the government has made certain types of relationships/ contracts illegal. "Free to look elsewhere" is quite loaded, when the employer may be taking unfair advantage.

An example, at least in my state, would be nannies.  CA requires anyone who cares for more than 1 family's offspring at a time to be licensed.

If you employ a nanny, you are their employer.  You need to pay their social security taxes to the Feds, among other things.  You cannot, for example "nanny share" with another family AT THE SAME TIME DURING THE SAME HOURS, and treat them like a "contractor".

(If a nanny, for example, wanted to work for you MTW, and someone else Th F, then they MAY be an independent contractor.)

That sounds like a nightmare and plenty of billable hours for a lawyer. Haha. What ever happened to, “I’ll do this for this much money” “ok, deal”

[ixtap]

If two parties enter into a contract should it be illegal simply because a third party thinks it’s “unfair”?

I disagree with your premise that there is a serious power imbalance between employer/employee and that history has shown us the free market cannot efficiently solve it. Free movement of labor is the best way to solve this multi-variable problem.

That is exactly what history has shown us. The "free" market favors the owners, not the workers, in most conditions.

[Pooplips]

If two parties enter into a contract should it be illegal simply because a third party thinks it’s “unfair”?

I disagree with your premise that there is a serious power imbalance between employer/employee and that history has shown us the free market cannot efficiently solve it. Free movement of labor is the best way to solve this multi-variable problem.

That is exactly what history has shown us. The "free" market favors the owners, not the workers, in most conditions.

I disagree. You can quit your job at anytime. Don’t have any other employment opportunities you like? Start your own business and sell directly to customers.

The only thing that ever gets in the way of you doing this is the state.

[Paul der Krake]

If two parties enter into a contract should it be illegal simply because a third party thinks it’s “unfair”?

I disagree with your premise that there is a serious power imbalance between employer/employee and that history has shown us the free market cannot efficiently solve it. Free movement of labor is the best way to solve this multi-variable problem.

A wild libertarian appears!

[ixtap]

If two parties enter into a contract should it be illegal simply because a third party thinks it’s “unfair”?

I disagree with your premise that there is a serious power imbalance between employer/employee and that history has shown us the free market cannot efficiently solve it. Free movement of labor is the best way to solve this multi-variable problem.

That is exactly what history has shown us. The "free" market favors the owners, not the workers, in most conditions.

I disagree. You can quit your job at anytime. Don’t have any other employment opportunities you like? Start your own business and sell directly to customers.

The only thing that ever gets in the way of you doing this is the state.

So yo have never heard of big corporations undercutting the prices of mom and pop stores until they go out of business?

[GuitarStv]

If two parties enter into a contract should it be illegal simply because a third party thinks it’s “unfair”?

That's exactly what the people of your country have decided, so yes.  You are of course, free to utilize a free market approach to this particular problem and move to a different country without such protections if you don't like it.  Somalia is particularly Libertarian at the moment.

[jlcnuke]

Oliver's piece on the WWE from the week before is fairly relevant with regards to employment issues.

I would like to see the wrestlers of the WWE come together, leave and start there own company. They are voluntarily signing those contracts.

If a contract is illegal (calling employees private contractors) should it still be legally binding?

I guess that depends on the legal definition of “employee”. I’m curious, how can an employment contract be “illegal” between two parties?

If you hire someone as a private contractor, who doesn't meet the legal definition of private contractor . . . I'd say that's an invalid contract.

I agree. That means they should have no problem leaving for another company, job or employment opportunity.

Agreed, if the contract is invalidated before work has been completed.  No harm, no foul then.

if the contract has been fulfilled (or partially fulfilled) it becomes a more difficult problem to solve.  In this particular case I think that the employer should be responsible for the benefits that were legally due but not provided to the employee while they were working.  Otherwise there's no legal incentive for the employer to ever stop using illegal contracts.

Can you knowingly sign a contract that doesn’t meet requirements then retroactively sue for the difference in benefits?

Yes, you can. Sign a contract that says you won't get paid overtime, though the position is not an exempt position, and you can have the courts get you the pay the contract should have had in it (though generally the DOL, state or federal, will make that happen without you needing to file any suits). If the contract violates the laws of the land, even if you agree to it, those illegal provisions are not valid and the legal requirements are fully enforceable.

Regarding employees that were classified as independent contractors by their employers, here's some tidbits from https://dpeaflcio.org/programs-publications/issue-fact-sheets/misclassification-of-employees-as-independent-contractors/

Legal Victories for Misclassified Workers
Both federal and state agencies and workers themselves are seeking legal action against misclassification. A number of these suits resulted in positive outcomes for the workers, establishing both correct classification and winning retroactive compensation for overtime and other lost benefits.

In April 2016, Uber decided to settle a class action lawsuit for brought against it by drivers in California and Massachusetts for $100 million. Because the case did not go to trial, the independent contractor dispute question has not yet been resolved.[49]
In April 2015, DOL announced that it recovered $700,000 in back wages, damages, and penalties for over 1,000 misclassified construction industry workers in Utah and Arizona.[50]
In September 2014, a Sacramento Superior Court in California ruled that The Sacramento Bee misclassified over 5,100 newspaper carriers as independent contractors.[51]
In May 2013, the DOL helped 196 employees at a Kentucky based cable installer recover over $1 million in retroactive overtime pay and other benefits.[52]
In 2012 and 2013, after having hired 300 additional investigators,[53] the DOL collected more than $18.2 million in back wages on behalf of 19,000 employees who had been misclassified.[54]
Two separate class action lawsuits launched by exotic dancers resulted in multi-million dollar settlements for the employees long misclassified as independent contractors. The litigation in both cases was lengthy; however, this could prove useful in establishing precedent for other misclassified employees in an industry where it appears misclassification is common practice. Going forward the employers involved in the suits will no longer classify dancers as independent contractors, but as either employees or shareholders.[55]

[Travis]

If two parties enter into a contract should it be illegal simply because a third party thinks it’s “unfair”?

I disagree with your premise that there is a serious power imbalance between employer/employee and that history has shown us the free market cannot efficiently solve it. Free movement of labor is the best way to solve this multi-variable problem.

When that third party is a court of law - absolutely. That's their purpose.

What exactly is "free movement of labor" and how does it apply to this situation?

[PDXTabs]

If two parties enter into a contract should it be illegal simply because a third party thinks it’s “unfair”?

In the USA there is this thing called the IRS, and it turns out that the employee vs contractor issue has direct impact on some tax issues. In which case, they start to care.

[Pooplips]

If two parties enter into a contract should it be illegal simply because a third party thinks it’s “unfair”?

I disagree with your premise that there is a serious power imbalance between employer/employee and that history has shown us the free market cannot efficiently solve it. Free movement of labor is the best way to solve this multi-variable problem.

A wild libertarian appears!

I’m not sure how that makes me libertarian but I take acception to the term ‘wild’. Haha

[Pooplips]

If two parties enter into a contract should it be illegal simply because a third party thinks it’s “unfair”?

I disagree with your premise that there is a serious power imbalance between employer/employee and that history has shown us the free market cannot efficiently solve it. Free movement of labor is the best way to solve this multi-variable problem.

No, but I have heard of big corporations being more efficient and offering products at lower prices than mom and pop stores. Costumers prefer lower prices which makes it hard on mom and pop stores for sure.

That is exactly what history has shown us. The "free" market favors the owners, not the workers, in most conditions.

I disagree. You can quit your job at anytime. Don’t have any other employment opportunities you like? Start your own business and sell directly to customers.

The only thing that ever gets in the way of you doing this is the state.

So yo have never heard of big corporations undercutting the prices of mom and pop stores until they go out of business?

Edit: It didn’t post my response the first time.

No, but I have heard of large corporations being more efficient giving them the ability to lower prices. Customers prefer lower prices which can be difficult for mom and pop stores.

[Pooplips]

If two parties enter into a contract should it be illegal simply because a third party thinks it’s “unfair”?

That's exactly what the people of your country have decided, so yes.  You are of course, free to utilize a free market approach to this particular problem and move to a different country without such protections if you don't like it.  Somalia is particularly Libertarian at the moment.

Thanks for the advice. I am weighing my options.

[Pooplips]

Yes, you can. Sign a contract that says you won't get paid overtime, though the position is not an exempt position, and you can have the courts get you the pay the contract should have had in it (though generally the DOL, state or federal, will make that happen without you needing to file any suits). If the contract violates the laws of the land, even if you agree to it, those illegal provisions are not valid and the legal requirements are fully enforceable.

Regarding employees that were classified as independent contractors by their employers, here's some tidbits from https://dpeaflcio.org/programs-publications/issue-fact-sheets/misclassification-of-employees-as-independent-contractors/

Legal Victories for Misclassified Workers
Both federal and state agencies and workers themselves are seeking legal action against misclassification. A number of these suits resulted in positive outcomes for the workers, establishing both correct classification and winning retroactive compensation for overtime and other lost benefits.

In April 2016, Uber decided to settle a class action lawsuit for brought against it by drivers in California and Massachusetts for $100 million. Because the case did not go to trial, the independent contractor dispute question has not yet been resolved.[49]
In April 2015, DOL announced that it recovered $700,000 in back wages, damages, and penalties for over 1,000 misclassified construction industry workers in Utah and Arizona.[50]
In September 2014, a Sacramento Superior Court in California ruled that The Sacramento Bee misclassified over 5,100 newspaper carriers as independent contractors.[51]
In May 2013, the DOL helped 196 employees at a Kentucky based cable installer recover over $1 million in retroactive overtime pay and other benefits.[52]
In 2012 and 2013, after having hired 300 additional investigators,[53] the DOL collected more than $18.2 million in back wages on behalf of 19,000 employees who had been misclassified.[54]
Two separate class action lawsuits launched by exotic dancers resulted in multi-million dollar settlements for the employees long misclassified as independent contractors. The litigation in both cases was lengthy; however, this could prove useful in establishing precedent for other misclassified employees in an industry where it appears misclassification is common practice. Going forward the employers involved in the suits will no longer classify dancers as independent contractors, but as either employees or shareholders.[55]

Thank you for the info. Doesn’t seem right but it is what it is.

[Pooplips]

If two parties enter into a contract should it be illegal simply because a third party thinks it’s “unfair”?

I disagree with your premise that there is a serious power imbalance between employer/employee and that history has shown us the free market cannot efficiently solve it. Free movement of labor is the best way to solve this multi-variable problem.

When that third party is a court of law - absolutely. That's their purpose.

What exactly is "free movement of labor" and how does it apply to this situation?

You say that like the court of law is the almighty. That court of law once held that slavery was legal. They may not always be right.

Free movement of labor is the ability for consenting adults to engage in any employment contract they wish too. If I want to work for $5/hr, I should be allowed to. It is my body after all.

[GuitarStv]

If two parties enter into a contract should it be illegal simply because a third party thinks it’s “unfair”?

I disagree with your premise that there is a serious power imbalance between employer/employee and that history has shown us the free market cannot efficiently solve it. Free movement of labor is the best way to solve this multi-variable problem.

No, but I have heard of big corporations being more efficient and offering products at lower prices than mom and pop stores. Costumers prefer lower prices which makes it hard on mom and pop stores for sure.

That is exactly what history has shown us. The "free" market favors the owners, not the workers, in most conditions.

I disagree. You can quit your job at anytime. Don’t have any other employment opportunities you like? Start your own business and sell directly to customers.

The only thing that ever gets in the way of you doing this is the state.

So yo have never heard of big corporations undercutting the prices of mom and pop stores until they go out of business?

Edit: It didn’t post my response the first time.

No, but I have heard of large corporations being more efficient giving them the ability to lower prices. Customers prefer lower prices which can be difficult for mom and pop stores.

https://en.wikipedia.org/wiki/Dumping_(pricing_policy)
Dumping is well documented historically, and a very effective practice of selling below profit levels to drive competition out of business.  After a few years of dumping the larger company can raise prices and increase market share, but most small retailers are out of business permanently as they usually don't have the capital needed to restart their business after the costs incurred while trying to match unsustainable prices caused by the dumping.  If small retailers start to establish again to fill the market niche, then another round of dumping can be simply used to drive them out again.

A great many other issues arise when unregulated free markets exist which damage competition:
https://en.wikipedia.org/wiki/Price_fixing
https://en.wikipedia.org/wiki/Dividing_territories
https://en.wikipedia.org/wiki/Limit_price
https://en.wikipedia.org/wiki/Tying_(commerce)

I get that it's popular in certain circles to pretend government regulation serves no purpose, but this view is typically one held by those ignorant of history.

[markbike528CBX]

Yes, you can. Sign a contract that says you won't get paid overtime, though the position is not an exempt position, and you can have the courts get you the pay the contract should have had in it (though generally the DOL, state or federal, will make that happen without you needing to file any suits). If the contract violates the laws of the land, even if you agree to it, those illegal provisions are not valid and the legal requirements are fully enforceable.

Regarding employees that were classified as independent contractors by their employers, here's some tidbits from https://dpeaflcio.org/programs-publications/issue-fact-sheets/misclassification-of-employees-as-independent-contractors/

Legal Victories for Misclassified Workers
Both federal and state agencies and workers themselves are seeking legal action against misclassification. A number of these suits resulted in positive outcomes for the workers, establishing both correct classification and winning retroactive compensation for overtime and other lost benefits.

In April 2016, Uber decided to settle a class action lawsuit for brought against it by drivers in California and Massachusetts for $100 million. Because the case did not go to trial, the independent contractor dispute question has not yet been resolved.[49]
In April 2015, DOL announced that it recovered $700,000 in back wages, damages, and penalties for over 1,000 misclassified construction industry workers in Utah and Arizona.[50]
In September 2014, a Sacramento Superior Court in California ruled that The Sacramento Bee misclassified over 5,100 newspaper carriers as independent contractors.[51]
In May 2013, the DOL helped 196 employees at a Kentucky based cable installer recover over $1 million in retroactive overtime pay and other benefits.[52]
In 2012 and 2013, after having hired 300 additional investigators,[53] the DOL collected more than $18.2 million in back wages on behalf of 19,000 employees who had been misclassified.[54]
Two separate class action lawsuits launched by exotic dancers resulted in multi-million dollar settlements for the employees long misclassified as independent contractors. The litigation in both cases was lengthy; however, this could prove useful in establishing precedent for other misclassified employees in an industry where it appears misclassification is common practice. Going forward the employers involved in the suits will no longer classify dancers as independent contractors, but as either employees or shareholders.[55]

As a chemist, official title "Principal Field Service Engineer" it was once held that I should be classified as a pipefitter, even though I am not qualified, never touched plant equipment, not part of any union or craft organization. We were running a chemical cleaning unit. We did have plant pipefitters make all connections.  The state Department of Labor said so, so I ended getting $1500 extra for that job.

[Pooplips]

If two parties enter into a contract should it be illegal simply because a third party thinks it’s “unfair”?

I disagree with your premise that there is a serious power imbalance between employer/employee and that history has shown us the free market cannot efficiently solve it. Free movement of labor is the best way to solve this multi-variable problem.

No, but I have heard of big corporations being more efficient and offering products at lower prices than mom and pop stores. Costumers prefer lower prices which makes it hard on mom and pop stores for sure.

That is exactly what history has shown us. The "free" market favors the owners, not the workers, in most conditions.

I disagree. You can quit your job at anytime. Don’t have any other employment opportunities you like? Start your own business and sell directly to customers.

The only thing that ever gets in the way of you doing this is the state.

So yo have never heard of big corporations undercutting the prices of mom and pop stores until they go out of business?

Edit: It didn’t post my response the first time.

No, but I have heard of large corporations being more efficient giving them the ability to lower prices. Customers prefer lower prices which can be difficult for mom and pop stores.

https://en.wikipedia.org/wiki/Dumping_(pricing_policy)
Dumping is well documented historically, and a very effective practice of selling below profit levels to drive competition out of business.  After a few years of dumping the larger company can raise prices and increase market share, but most small retailers are out of business permanently as they usually don't have the capital needed to restart their business after the costs incurred while trying to match unsustainable prices caused by the dumping.  If small retailers start to establish again to fill the market niche, then another round of dumping can be simply used to drive them out again.

A great many other issues arise when unregulated free markets exist which damage competition:
https://en.wikipedia.org/wiki/Price_fixing
https://en.wikipedia.org/wiki/Dividing_territories
https://en.wikipedia.org/wiki/Limit_price
https://en.wikipedia.org/wiki/Tying_(commerce)

I get that it's popular in certain circles to pretend government regulation serves no purpose, but this view is typically one held by those ignorant of history.

Price to low - dumping
Price to high - gouging
Price the same - collusion

Let’s face it. You can’t win.

[sol]

Price to low - dumping
Price to high - gouging
Price the same - collusion

Let’s face it. You can’t win.

You can totally win.  Just charge fair market rates! 

Don't deliberately lose money on sales in order to ruin your competition, because that's bad for free markets.  Don't deliberately overcharge people by taking advantage of their misfortune, because that's bad for free markets.  And then don't make any secret back room deals with your competition in order to overcharge customers, because that's bad for free markets.

Instead, charge the highest price you can fairly get people to pay.  If you charge too much they will buy less and you will make less profit than if you had charged less.  If you charge too little they will buy it all but you will make less profit than if you had charged more.  So just try to find the price that makes you the most money in a free and open exchange, and you and the customer both win. 

At least, that's the simple model of how capitalism is supposed to work.  Complications arise when there are no police around to prevent dumping, gouging, and collusion.  Even the idealized "free market" model needs regulation to avoid theft and enforce contracts.  Truly unregulated markets always end up being dominated by thugs and strongmen, because unrestricted criminal activity is always more profitable than fair competition. 

[zolotiyeruki]

Price to low - dumping
Price to high - gouging
Price the same - collusion

Let’s face it. You can’t win.

You can totally win.  Just charge fair market rates! 

Don't deliberately lose money on sales in order to ruin your competition, because that's bad for free markets.  Don't deliberately overcharge people by taking advantage of their misfortune, because that's bad for free markets.  And then don't make any secret back room deals with your competition in order to overcharge customers, because that's bad for free markets.

Instead, charge the highest price you can fairly get people to pay.  If you charge too much they will buy less and you will make less profit than if you had charged less.  If you charge too little they will buy it all but you will make less profit than if you had charged more.  So just try to find the price that makes you the most money in a free and open exchange, and you and the customer both win. 

At least, that's the simple model of how capitalism is supposed to work.  Complications arise when there are no police around to prevent dumping, gouging, and collusion.  Even the idealized "free market" model needs regulation to avoid theft and enforce contracts.  Truly unregulated markets always end up being dominated by thugs and strongmen, because unrestricted criminal activity is always more profitable than fair competition.

I don't think anyone will argue that a completely unfettered free market is perfect.  I'm a huge fan of free markets, but recognize that there are cases where they're imperfect and government involvement is good, for example:
1) monopoly/duopoly/collusion
2) intellectual property
3) situations where there's an imbalance of information, i.e. uninformed consumers
4) enforcement of contracts
5) reserving use of force for the government (i.e. you can't go smash your competitor's kneecaps)

On the topic of gouging, I'm going to take an unpopular position by saying that except in some cases of both monopoly power and life-threatening and/or life-altering situations, it doesn't actually happen.  Several years ago, I lived in Texas, and rode out a couple of hurricanes.  One story that got a lot of attention was a group of people from the midwest who purchased a semi truck's worth of generators, drove down to the gulf coast, and were selling the generators for something like double their original cost.  They caught a lot of flak for "gouging."  But what's the alternative?  If you take away the profit motive, you don't get people trucking generators down where they're needed most, and everyone loses out.

[sol]

a group of people from the midwest who purchased a semi truck's worth of generators, drove down to the gulf coast, and were selling the generators for something like double their original cost.  They caught a lot of flak for "gouging."  But what's the alternative?  If you take away the profit motive, you don't get people trucking generators down where they're needed most, and everyone loses out.

I don't think that's gouging, that's market pricing.  Everyone who truly needs a generator (e.g. hospitals) already had one.

Are other people free to truck down their own load of generators and sell them for less?  Are customers allowed to buy generators from more than one place?  Are the people selling generators each setting their own prices independently?  Seems like fair market value to me.  No one screams gouging when oil prices go up because demand exceeds supply, and I don't see how generators are fundamentally different from oil in this context.

[Travis]

If two parties enter into a contract should it be illegal simply because a third party thinks it’s “unfair”?

I disagree with your premise that there is a serious power imbalance between employer/employee and that history has shown us the free market cannot efficiently solve it. Free movement of labor is the best way to solve this multi-variable problem.

When that third party is a court of law - absolutely. That's their purpose.

What exactly is "free movement of labor" and how does it apply to this situation?

You say that like the court of law is the almighty. That court of law once held that slavery was legal. They may not always be right.

Free movement of labor is the ability for consenting adults to engage in any employment contract they wish too. If I want to work for $5/hr, I should be allowed to. It is my body after all.

The Courts interpret the law. They don't make it.  If they're making it out of whole cloth they're overstepping their mandate. 

Regarding the movement of labor, I was thinking more along the lines of "Corporation X has an army of lawyers writing labor contacts, and little ignorant you is across the table with few options for getting your own expert to review it."  Would your hypothetical contract include provisions for maximum work hours, breaks, working outside the scope of normal duties, insurance, sick leave, etc?  If it did your contract would be a massive document in order to account for many of the things that are currently covered by state and federal labor laws.  You might forget a few clauses your employer could exploit.

[BTDretire]

Oliver's piece on the WWE from the week before is fairly relevant with regards to employment issues.

I would like to see the wrestlers of the WWE come together, leave and start there own company. They are voluntarily signing those contracts.

If a contract is illegal (calling employees private contractors) should it still be legally binding?

I guess that depends on the legal definition of “employee”. I’m curious, how can an employment contract be “illegal” between two parties?

  I worked for 10 years as an independent contractor, but I'm certain that if the government looked into it, I would have been reclassified as an employee. I did VCR repair in a consumer electronics repair shop.
 I worked solely in his shop, I used his supplies and he got the markup, I would have been hard for me to incur any loss in my position and few other items. But I was happy with the situation, I earned more money than I had ever earned, even though I had to pay the additional SS tax. My best year I earned an inflation adjusted $139k. It was great until the price of VCRs dropped to the point that people started buying new instead of repairing them. I moved on, told another I.C. I was leaving and he might want to take on my repairs. A year later I came back for a visit, the other I.C. said he only came in 3 days a week to do any VCRs that had come in.
 PS. DVDs were just coming out, I thought about learning to repair those, I'm glad I didn't, their prices dropped much quicker then VCRs.

[BicycleB]

  I worked for 10 years as an independent contractor, but I'm certain that if the government looked into it, I would have been reclassified as an employee. I did VCR repair in a consumer electronics repair shop.
 I worked solely in his shop, I used his supplies and he got the markup, I would have been hard for me to incur any loss in my position and few other items. But I was happy with the situation, I earned more money than I had ever earned, even though I had to pay the additional SS tax. My best year I earned an inflation adjusted $139k. It was great until the price of VCRs dropped to the point that people started buying new instead of repairing them. I moved on, told another I.C. I was leaving and he might want to take on my repairs. A year later I came back for a visit, the other I.C. said he only came in 3 days a week to do any VCRs that had come in.
 PS. DVDs were just coming out, I thought about learning to repair those, I'm glad I didn't, their prices dropped much quicker then VCRs.

Interesting story!